What is bankruptcy?

Bankruptcy means the insolvency of a debtor declared by a court judgement. A bankruptcy petition may be filed by the debtor, a creditor, a successor of the debtor or other persons provided by law. If a legal person is permanently insolvent, the members of its management board or liquidators must file a bankruptcy petition themselves.

In a bankruptcy procedure, the claims of the creditors are satisfied out of the assets of the debtor by transferring the assets of the debtor or rehabilitating (reorganising) the undertaking thereof. A debtor who is a natural person is given the opportunity to settle his or her debts in the course of the bankruptcy proceedings.

A bankruptcy petition is filed with the court of the place of residence or location of the debtor. Upon filing a bankruptcy petition or another application or complaint related to the bankruptcy proceedings, a state fee must be paid pursuant to the State Fees Act. Notices related to bankruptcy proceedings are published in the official publication Ametlikud Teadaanded. Register entries of a bankrupt legal person can be found in the central database of the court which maintains the register. Data about prohibitions on business can be found in the same source.